(Bloomberg) -- The UK’s new Labour government should focus on projects related to climate technology and homebuilding in its multibillion-pound investment push, according to the chief executive officers of two of the country’s largest lenders.
Prime Minister Keir Starmer convened a summit on Monday with executives from the likes of BlackRock Inc., Vodafone Group Plc and GSK Plc attending to find out what incentives the government will offer to encourage them to pour money into factories, infrastructure and job creation across the country.
“The UK is already a leader around offshore wind, floating wind, offshore wind, the growth in solar, some of the new technologies like carbon capture and hydrogen,” Lloyds Banking Group Plc’s Charlie Nunn said in an interview with Bloomberg Television at the event. “There’s huge opportunity to invest and that also needs a clear plan for the national grid and the electrical infrastructure.”
On Sunday, the Department for Business and Trade said it would prioritize eight sectors in its new industrial strategy: financial services, defense, life sciences, technology, clean energy, creative industries, advanced manufacturing and professional and business services. The agency also named Microsoft Corp.’s Clare Barclay to chair its new Industrial Strategy Advisory Council.
Investment “will be on the riskier end, things like climate tech, biotech and pharma — not necessarily risky in some absolute sense, but these are ventures,” Barclays Plc’s C.S. Venkatakrishnan said in a separate interview. “When it comes to housing, the risk-reward will be extremely generous because I think housing is an important need of the country.”
Some financiers have questioned holding an investment summit before Chancellor of the Exchequer Rachel Reeves has had a chance to present the budget, which is scheduled to take place on October 30. The government has repeatedly said it’s considering new forms of taxation on the country’s wealthiest residents as it looks to fill a £22 billion fiscal hole.
Still, international investors won’t be deterred by talk of raising taxes on private equity investors or scrapping a preferential tax regime for wealthy foreigners living in the UK, according to Nunn.
“The kind of investors we’re talking about are the big international pension funds, the big international sovereign wealth funds, the private credit funds,” Nunn said. “They’re going to be looking for good projects with a good return with a government and a country that’s getting behind making those investments successful, that’s what will matter.”
Both Nunn and Venkatakrishnan declined to comment on how a potential bank tax could impact their efforts to cultivate investment in the country. Some City executives have feared the Labour party would consider a windfall tax on banks, raising the surcharge that lenders pay on top of corporation tax or even reviving the idea of a financial transaction tax.
“Banks are among the highest taxed entities in the UK, we’re an important part of the economy,” Venkatakrishnan said. “I always say it’s really important for the UK to recognize that the financial industry is in its national interest.”
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